Obeid cafes for lease as family takes court break

CIRCULAR Quay was teeming with tourists as passengers disembarked from the massive cruise ship Voyager of the Seas.

But looking more like a case of the Mary Celeste yesterday were two prime ocean-side cafes that appeared to have been abandoned in a hurry. Trays of rum and raisin ice-cream sat melting under the glass counter.

The cafes' secret owners, the family of Labor powerbroker Eddie Obeid, probably had a different kind of rum on the brain having been accused of corruption not seen since the days of the Rum Corps.

Affixed to the glass windows on each cafe was a sign saying the leases had been terminated by Maritime Services and an ''open expression of interest'' process would be held to re-lease the cafes. The Obeids owe rent of more than $275,000. Arc, a third Circular Quay cafe, also secretly controlled by the Obeids, was still open for business.

Meanwhile, the expressions of interest process in coal exploration licences, which enabled the Obeids to make $100 million, was being examined across town at the Independent Commission Against Corruption.

The commission has heard that the Obeids disguised their interest in two of the successful companies awarded coal licences. The then resources minister Ian Macdonald also insisted that the boundaries of the Mount Penny tenement be altered so as to encompass three rural properties in which the Obeids also had interests.

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Commissioner David Ipp expressed incredulity at the three-member evaluation committee which failed to do any financial assessments on the mining companies competing for the 11 coal exploration licences on offer in 2009. ''So you could get a bunch of $2 companies with no financial resources who could promise the world, you wouldn't check it out and you'd be happy to grant them exploration licences?'' he asked a departmental officer, Ado Zanella. Mr Zanella replied that they relied on the information provided to them by the bidders.

Only days before the winning bidders were announced the preferred tenderer of six of the 11 licences, Monaro Mining, which had never mined any coal, announced it was pulling out. It wrote a letter to the evaluation committee saying it was transferring its interests to Royal Coal, then in further correspondence it corrected that name to Loyal Coal, then to Voope.

Another committee member, William Hughes, agreed he made ''no inquiry whatsoever as to what was going on'' with this last-minute change of corporate entities.

Loyal Coal and Voope have been revealed as companies associated with Eddie Obeid, also a former mining minister.

When Mr Macdonald asked for the tender to be re-opened so that his friend Travers Duncan could apply, the probity auditor Kevin Fennell was engaged to review the process.

Mr Fennell, who retired in 1994 after 44 years in the Auditor General's office, said no formal training was required to be become a probity auditor, ''anybody could do it really''.

Mr Fennell said he initially declined to sanction the re-opening but changed his mind. ''My view was that if a minister of the Crown wants to do something he's going to do it anyway and it probably wouldn't have mattered what I said.''

Mr Fennell was asked what he would have done had he known ''a close friend of the minister … was a beneficiary of one of the companies that wanted to get in'' on the tender. ''I'd have sent it to the ICAC,'' replied Mr Fennell, which attracted laughter from the public gallery.